Washington's 2016 Year-End Spending Spree
GUEST POST WRITTEN BY
Mr. Kalin is director of media relations at Citizens Against Government Waste.
On October 6, 2016 Adam Andrzejewski, founder of OpenTheBooks.com
, "The fiscal year-end at the federal government doesn’t just have the appearance of being a big party. It, in fact, is a big party." Thankfully, many options exist for taxpayers to shut down these wasteful festivities.
As every federal fiscal year winds down, a frustrating ritual takes place throughout departments and agencies: a spending surge on frivolous items in order to avoid budget cuts in the next fiscal year. The final month of fiscal year 2016 was no exception.
These spending sprees are the result of baseline budgeting, under which an agency’s budget’s starting point is derived from the previous year’s spending. This flawed strategy almost always ensures that budgets expand and more taxpayer dollars are spent every year. Federal agencies have long ago discovered they can work the system by spiking their rate of spending in the month of September–the last month of the fiscal year–to ensure a higher funding level and avoid the perception that they can function with less taxpayer money. The practice is known as "spend it or lose it."
A September 2016 Mercatus Center report
found that from FY 2003-2015, "federal agencies spent almost a quarter of their annual obligated contract funds in August and September." Mercatus’ previous study
on year-end spending in September 2014 found that the State Department spent 37.8% of its entire annual budget in the month of September. On average, the Department of Health and Human Services burned through more than a quarter of its budget in the final month. A 2010 Harvard study found
that from 2004-2009, spending in the final week at the Department of Defense was four times higher than the average weekly spending throughout the rest of the year.